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Noel Canning victorious as U.S. Supreme Court unanimously rules to invalidate President Obama's 2012 recess appointments to NLRB

June 2014

In a decisive victory for Jones Day client Noel Canning, the Court held that the President's three January 2012 recess appointments were unconstitutional under the Recess Appointments Clause. Working closely with the National Chamber Litigation Center and the Coalition for a Democratic Workplace, Jones Day on behalf of the Noel Canning Corporation succeeded in persuading the Court to hold that the Recess Appointments Clause of the U.S. Constitution does not permit Presidents to make appointments during recesses of less than 10 days. Accordingly, because the three National Labor Relations Board (NLRB) recess appointments at issue were made during a three-day adjournment of the Senate in January 2012, they were unconstitutional.

The impact of the Court's decision will be substantial. Prior to this decision, the Supreme Court had never considered the scope of the Recess Appointments Clause or articulated a rule to govern presidential use of the Clause. The construction of the Clause that the Supreme Court announced today will bind every future President in his or her exercise of the recess appointments power. The Court's decision will therefore be a central consideration in how all future Presidents staff their administrations and select their subordinates. The Court's decision will also have a major impact directly on the NLRB and its operations. Because the NLRB must maintain a quorum of three validly appointed members in order to conduct official business, New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635 (2010), the Court's decision in Noel Canning means that the Board did not have three validly appointed members, and thus did not possess authority to conduct official business between roughly January 2012 and August 2013. As a result, any decisions and actions of the Board during that 20-month period are invalid. In all, the practical impact of the Court's ruling will likely be as follows:

· Between 700 and 1,000 reported and unreported decisions issued by the quorum-less NLRB are invalid. This includes a significant number of highly controversial decisions that either modified or overruled past Board precedent.
· Enforcement actions brought by as many as 10 NLRB Regional Directors who were approved by the 2012–13 recess-appointee Board are arguably invalid.
· Delegations of authority from the recess-appointee Board to its Acting General Counsel are also arguably invalid.
· According to the NLRB's Office of Public Affairs, there are currently more than 100 pending legal challenges to the January 2012 recess-appointee Board, with at least one case pending in each of the 12 federal circuit courts. Many—if not all—of these cases will likely be returned to the NLRB for reconsideration.
· To the extent that NLRB decisions after August 2013 relied upon cases that overturned or modified precedent established by a quorum-less recess-appointee Board, such decisions are subject to collateral attack.

Sorting out all of these details will take time, as the current Board will now be called upon to revisit all decisions invalidated by Noel Canning. Following the Court's 2010 decision in New Process Steel, it took the Board approximately three years to reconsider around 100 decisions. Now, although the Board is at full strength with all members confirmed, it is tasked with resolving as many as 1,000 reported and unreported decisions—not to mention the propriety of regional-director appointments and prior delegations of authority to its General Counsel.

How the Board will deal with these and other issues remains to be seen. Should the Board follow the procedure it used after New Process Steel, litigants will be invited to file motions for reconsideration if there have been changes in the facts since the original decision issued. But even if the Board takes a different approach, parties may still appeal adverse Board decisions in the federal courts since the National Labor Relations Act imposes no statute of limitations on appealing Board orders. As noted, this would include not only appeals from Board decisions, but also appeals challenging the actions of the then-Acting General Counsel whose purported authority had been delegated by the quorum-less Board, as well as actions of Regional Directors who were appointed by that same quorum-less Board.

Noel Canning v. NLRB, No. 12-1281, slip op. (June 26, 2014); National Labor Relations Board v. Noel Canning, No. 12-1115 (D.C. Cir., January 25, 2013)

Client(s): Noel Canning Corporation, U.S. Chamber of Commerce
Office(s): Washington, Columbus